This section includes a market overview and trade data for the electricity sector in Mexico. This sector is important because of the growing demand in Mexico for electricity for industrial and commercial users. This section includes relevant information on the electrical power system comprised by generation, transmission, distribution, sales, retail, and consumption.

Overview

Mexico’s National Power System (Sistema Eléctrico Nacional or SEN) is one of the largest in the Western Hemisphere. It is comprised of nine regions, plus a binational electricity system in Baja California. Most of the nine regions are interconnected, forming the National Interconnected System (Sistema Interconectado Nacional or SIN). The Baja California system operates in the Western Interconnection of the United States, overseen by the Western Electricity Coordinating Council (WECC).

According to Mexico’s National Power System Development Program (Programa de Desarrollo del Sistema Eléctrico Nacional or PRODESEN), the electricity consumption of the National Electricity System was 333,662 GWh in 2022, which represented an annual increase of 3.4 percent. This increase is attributed to the recovery of all productive sectors of the economy after the pandemic. It is estimated that consumption will increase an average of 2.5 percent annually between 2023 and 2037.

The total installed capacity in 2021, including power generation plants from the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) and from private companies, reached 86,153 MW. In 2022, the installed capacity increased to 87,130 MW, which represented an increase of 1.3 percent in comparison to 2021. If interconnected power generation plants and distributed generation are added, the total installed capacity reached 92,503 MW in 2022.

In 2022, the National Power System registered power generation of 340,713 GWh, from which 31.2 percent corresponded to clean energy sources (renewable and non-renewable, such as nuclear and efficient cogeneration), and 68.8 percent corresponded to fossil fuels (combined cycle, conventional thermal, coal-fired, gas-fired, and internal combustion).

According to the International Energy Agency, Mexico’s population is expected to grow to over 150 million by 2050, considerably increasing energy demand. The industrial and commercial sectors account for 72 percent of electricity demand, representing the strongest opportunity for U.S. exports given the need to reduce energy costs and improve energy efficiency.

The electrical power sector has faced several policy changes under the current presidential administration, and those changes are altering the dynamics of the electricity market for private sector participants. Strengthening the role of CFE so it remains Mexico’s primary supplier of electricity has been a top priority of the Government of Mexico (GOM).

CFE’s Business Plan is aligned with the government priority to support CFE in regaining its leadership position. CFE is a State Productive Enterprise constituted by ten subsidiaries, five affiliated companies, and four business units. This structure presents operational, administrative, and financial challenges since there is legal separation in all activities of the different companies. The subsidiaries oversee public electricity service through six companies in charge of power generation. Another three subsidiaries oversee transmission, distribution, and supply of electricity.

National Power System Development Program 2023-2037

On May 29, 2023, the Secretariat of Energy (Secretaría de Energía or SENER) published the 2023-2037 National Power System Development Program (PRODESEN). This planning document is aligned with Mexico’s National Development Plan 2019-2024, and it addresses the electricity generation, transmission, distribution, and commercialization needs of the National Power System. The 2023-2037 PRODESEN emphasizes the commitment of the GOM to guarantee universal access to electricity and to contribute to the social and economic development of the country.

The National Power System provides service to more than 125 million inhabitants in the Mexican territory, as well as the state private industry throughout the country, which makes it one of the largest integrated electrical systems in the world. According to the PRODESEN, the main objective of the government is to satisfy electricity demand for all Mexican citizens at affordable prices and to guarantee the supply of electricity to all the productive sectors of the Mexican economy, with the purpose of achieving equality and reducing the North-South development gaps in Mexico. The number of end users that had electrical power in 2022 was 47.4 million, which represented an increase of 1.7 percent in comparison to the 46.7 million customers who had electrical power in 2021.

The PRODESEN specifically includes provisions concerning the modernization of the electrical system, which includes proposals for expansion projects of the national transmission and distribution networks, the development of new CFE power plants, as well as the rehabilitation, modernization, and installation of new equipment for CFE’s hydroelectric plants in operation. The planning of the electricity sector considers international commitments regarding the environment, the reduction of emissions, and mitigation of climate change. As part of the energy matrix, there are projections to increase the electricity generation from clean and renewable energy sources during 2023-2037.

The U.S. Commercial Service Mexico is closely following policy developments and their impact on current and future business opportunities in the electricity sector for U.S. exporters.

Table 1: Mexico Power Generation Equipment
(Figures in USD Billions, HS Codes 8501, 8502, 8503)

*Total market size = [(total local production + imports) – exports]

Source: Banco de México, ProMexico, est. from INEGI, SENER, (PRODESEN), U.S. International Trade Administration, Global Trade Atlas and interviews with importers, distributors, and end users of electrical equipment and power generation equipment and services

The market for power generation equipment in Mexico is estimated to increase 1.05 percent from 2022-2023, while exports from the United States to Mexico are expected to increase 0.93 percent.

Leading Sub-Sectors

Key sub-sectors relevant for U.S. exporters include power generation, energy efficiency, distributed generation, energy storage technologies, and small-scale renewable energy projects.

Opportunities

Mexico’s electrical power industry mainly offers opportunities for U.S. products, services, and technologies for energy efficiency, distributed generation, energy storage, small-scale renewable energy projects, and distribution networks. The U.S. Commercial Service Mexico is ready to assist you in exploring these opportunities in Mexico.

Federal Electricity Commission (CFE)

The U.S. Commercial Service Mexico has seen significant interest from companies seeking to supply projects to the CFE. Some of the projects can be located through CFE’s procurement website.

CFE’s investment portfolio consists of the Investment Projects and Programs (known as PPI in Spanish), which are subject to the availability of resources, as well as the approval of the Investment Commission, the Boards of Directors of CFE’s subsidiaries, and CFE’s Administration. According to CFE’s Business Plan, as part of the investment portfolio generation, transmission and distribution projects and programs (PPI) will account for 150,737 million pesos, or approximately USD 8.1 billion.

Distributed Generation

The Electrical Power Savings Trust (Fideicomiso para el Ahorro de la Energía Eléctrica or FIDE) has had a Distributed Generation Program since 2013. From 2013 to 2023, this program has supported 3,875 distributed generation projects, accounting for 1,378.38 million pesos, approximately UDD 74.91 million. Together, these distributed generation programs have added a total of 46.72 megawatts of accumulated installed capacity. These projects have not only contributed to end users of electricity with economic benefits and competitiveness, but also with reduction of polluting emissions to the environment.

FIDE’s program continues to be available in 2023 for residential users and small businesses to promote the use of electricity generated from clean energy sources and to facilitate access to new clean generation technologies through the granting of incentives for the acquisition of photovoltaic systems.

In addition, Mexico’s National Development Plan 2019-2024 establishes a new energy policy to promote sustainable development through the incorporation of renewable sources, which will be fundamental to provide electricity to small and isolated communities that represent two million inhabitants. This social aspect of the distributed generation is important to the current administration since the electricity supply brings social benefits to these communities, such as health, housing, and education to help rural populations, to reduce poverty, and to raise the quality of life of small communities.

One main concern with distributed generation is the integration of these generation systems, particularly photovoltaic, to the national power system plan. It will be important in the coming years to consider technologies and software that can help to integrate these systems and incorporate them as part of the demand and consumption forecasts, as well as interconnection with transmission and distribution networks.

Distribution Networks

The PRODESEN includes a chapter on the expansion and modernization of the general distribution networks. The main objective is to plan the expansion of these networks to meet increasing demand, to improve efficiency in the distribution of electricity, to improve the quality and reliability of electricity supply, and to identify rural communities and marginalized urban areas that do not have electricity service. According to this chapter, there will be a USD 247 million investment in distribution networks in 2023 and USD 494 million in 2024. These investments include smart grid projects such as remote operation and automation in networks, scaling of the measurement to advanced meter infrastructure, management of the energy balance for the electricity market, power quality monitoring systems, voice and data radio communication equipment, modernization of control equipment, and operation communication networks for substations and distribution control centers.

Moreover, the U.S. Commercial Service Mexico is seeing growing interest from both U.S. and Mexican companies at power sector-related trade shows. Despite the challenges presented by energy policies and delays in permits, the Mexican market remains competitive for suppliers of electricity infrastructure and smart grid technologies.

Resources

Events

• Power-Gen International, January 23-25, 2024. New Orleans, LA
• Distributech International, February 26-29, 2024. Orlando, FL
• Expo Eléctrica Internacional, June 4-6, 2024. Mexico City

Contacts

For more information on the electricity sector in Mexico, please contact:

Claudia Salgado

Commercial Specialist

U.S. Commercial Service —Mexico City

Tel.: +52 (55) 5080-2000 ext. 5224

Claudia.Salgado@trade.gov